Pakistan’s oil, food bill swells to $24.8 billion amid rising commodity prices, rupee depreciation

A woman buys grocery items at a store in Peshawar, Pakistan, on April 5, 2021. (AFP/File)
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Updated 15 May 2022
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Pakistan’s oil, food bill swells to $24.8 billion amid rising commodity prices, rupee depreciation

  • Petroleum products make up for 26% of Pakistan's overall imports worth $65.53 billion
  • Finance minister says he will talk to the IMF but refuses to withdraw energy subsidies

KARACHI: Pakistan’s oil and food import bills have swelled to $24.8 billion during the current fiscal year due to increasing global commodity prices and weakening national currency, according to official data and analysts. 

The oil and food import bills of the South Asian country, which is struggling with a worsening balance-of-payment crisis in the face of declining foreign exchange reserves, rose by 96 percent and 12.3 percent respectively from July 2021 till April 2022. 

Pakistan imported oil products worth $17.03 billion during this period, compared to imports worth $8.69 billion during the corresponding period last year. It contributed 26 percent to the country’s overall $65.53 billion imports, according to the Pakistan Bureau of Statistics (PBS). 

The food import bill during the period stood at $7.75 billion against the $6.9 billion recorded during the same period last year. The import of palm oil worth over $3 billion alone made up for a major share of the import bill, which surged by 44 percent from July till April. 

“The surging global commodity prices are a major reason behind high oil and food prices, mainly due to the Russia-Ukraine war and revival of COVID-19 that have disrupted the supply and demand balance,” Ahsan Mehanti, chief executive officer of the Arif Habib Commodities investment firm, told Arab News on Sunday. 

“Inflation triggered by the import of energy and food items at higher prices will continue to persist as long as the rupee does not recover.” 

The Pakistani currency continues to hit new lows against the United States (US) dollar as the demand for import payments continues to build pressure on the rupee. On Friday, the rupee hit yet another historic low as the greenback closed at Rs192.53 in the interbank market.    

The US dollar has gained 6 percent or Rs10.98 against the rupee since April 16, when it was trading at Rs181.55.  

Experts believe the Pakistani currency will recoup some of the lost ground after Islamabad and the International Monetary Fund (IMF) sign a deal for the revival of $6 billion loan program. 

“We see the dollar hitting Rs200 mark against the rupee before falling back to around Rs180,” Mehanti said. "We expect the rupee to recover after Pakistan signs a deal with the IMF next week." 

Pakistan and the IMF are currently negotiating the country's seventh review under the $6 billion Extended Fund Facility (EFF), which has so far disbursed $3 billion. Islamabad is expected to receive another $1 billion after the completion of the review.    

The review has been stalled since the previous government announced in February around $1.7 billion relief in energy prices while deviating from the objectives of the IMF program.  

“I am going to talk to the IMF and will find out the solution to the issue amicably,” Miftah Ismail, the Pakistani finance minister, said at a press conference in Islamabad on Sunday. 

“The government has no intention to further increase the petroleum prices. The prime minister has refused to burden the people further.” 

Pakistan’s imports of machinery also posted an increase by 20.5 percent to $9.5 billion from July till April as compared to $7.9 billion during the same period last year. Imports of telecom equipment jumped by 14 percent to $2.4 billion, while mobile phone imports rose by 7.4 percent to $1.8 billion.   

The South Asian nation imported vehicles worth $3.7 billion, which shows over 60 percent growth in 10 months of the current fiscal year.   

Pakistan suffered $39.3 billion trade deficit from July till April due to the highest ever imports of $65.53 billion. Experts call for addressing the situation by restricting the import of non-essential and luxurious goods.


Pakistan pushes back deadline for expressions of interest to buy national airline

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Pakistan pushes back deadline for expressions of interest to buy national airline

  • The extension came a day before the expressions of interest had originally been due
  • Pakistani tycoon Arif Habib, aviation-based company Gerry’s Group were among bidders

ISLAMABAD: Pakistan will push back the deadline for companies to express interest in buying national carrier Pakistan International Airlines to May 18, the country’s privatization minister said on Thursday.
The extension, announced in a statement by Minister for Investment and Privatization Abdul Aleem Khan, came a day before the expressions of interest had originally been due. He said 10 companies had already expressed an interest.
“The Board accorded approval for extension in the date for submission of interests on the request of interested parties,” he said, referring to the Privatization Commission Board he leads.
Pakistani tycoon Arif Habib and aviation-based company Gerry’s Group were among the 10 bidders looking to buy a majority stake in Pakistan International Airlines, Bloomberg News reported on Friday.
Arif Habib, Pakistan International Airlines and Gerry’s Group did not immediately respond to a Reuters request for comment.
Pakistan’s government has previously said it was putting on the block a stake of between 51 percent and 100 percent in the loss-making airline as part of reforms urged by the International Monetary Fund.
The disposal of the flag carrier is a step that past elected governments have steered away from as it is likely to be highly unpopular, but progress on the privatization will help cash-strapped Pakistan pursue further funding talks with the IMF.


A village in Pakistan keeps business and tradition of pottery alive

Updated 23 min 13 sec ago
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A village in Pakistan keeps business and tradition of pottery alive

  • At least 150 families are engaged in pottery-making in Tehi, village in Talagang district of Punjab province
  • Young craftsmen are trying to expand businesses by introducing innovation, delivering customized products

ISLAMABAD: Sitting in the veranda of his house, Muhammad Shabbir picked up a lump of clay and set it on a potter’s wheel as it spun before him, producing a whirring sound. A few meters away in a large courtyard, his two sons kneaded clay and put finished pots out to dry in the sunlight before they would be taken to a furnace to bake.

The scene is from Shabbir’s home in Tehi village of district Talagang in Pakistan’s vast Punjab province, some 150 kilometres from Pakistan’s federal capital, Islamabad, where over 150 families are involved in pottery as their primary source of livelihood. They have learnt the techniques and styles from their ancestors and continue to uphold the age-old tradition of fashioning clay wares by hand.

Around the world, pottery was replaced at the beginning of the 20th century by glass, aluminum, tin and plastic, materials all cheaper and better suited to most tasks than clay.

But Shabbir and his two sons remain steadfast in keeping the craft alive even as it no longer earns them enough to live a prosperous life.

“I have been doing this for the last twenty years,” Shabbir told Arab News. “I used to see my elders, first they used to make them [pots] and now I have engaged my sons to work in the business.”

A special, fine-grained soil sourced from a nearby village is used to make the pots, Shabbir said, which was mixed with sand and shaped into dough to be turned into different designs.

“We knead the mud, make a dough and bring it to the potter’s wheel and then design it into a pot. We put them out to dry and then bake them in the furnace to get the final product,” Shabbir explained.

Across the streets of Tehi, clay pots of different shapes and sizes were displayed at wholesale shops from where they are bought by locals, traders in Punjab and also exported to retailers across the country.

“GOVERNMENT SUPPORT”

Craftsmen in the village make the clay pots five months in a year, three months in summer and two in winter, and pause work in the rainy season when the weather is humid and frequent rains drench the giant clay furnaces used to bake the utensils.

Like Shabbir’s sons, many children in the village started learning pottery-making at a very young age to lend a helping hand to their elders.

Shabbir said his two sons had ambitions to leave the business and graduated high school but could not find jobs.

“We went to school, did matriculation, applied for a job but didn’t get it, and then decided why shouldn’t we learn the craft of our forefathers and do it,” Muhammad Kabeer, a young potter and Shabbir's son, told Arab News as he prepared dough in a barrel.

Kabeer and his younger brother said they wanted to expand their business and the family’s earnings by introducing innovation in the field and making customized pots on order.

“If a customer comes with their own designs, we give them two, three days’ time to deliver the order,” Kabeer said.

The family mainly makes clay pots for wholesalers and while loyal customers do keep ordering, Shabbir said the pottery business had been impacted by inflation and high transportation rates, forcing many people to switch to other lines of work.

Pakistan has been beset by inflation above 20% since May 2022, registering a high of 38 percent in May 2023 mainly due to high food and energy costs. Inflation eased off to 17.3%, the lowest since May 2022, on a year-on-year basis in April 2024 from 20.7% recorded in March 2024 and 36.4% in April 2023, official data issued this week.

His father added: “We work for five months and have to make do with those earnings for the whole year,” Shabbir lamented.

Kabir added:

“We sell them [the pots] to wholesalers and they pay us labor cost only ... If we get the government’s support, we can really expand this business and provide jobs to our friends as well.”


‘Historic moment’: Pakistani satellite bound for orbit in Chinese high-stakes moon mission today

Updated 35 min 43 sec ago
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‘Historic moment’: Pakistani satellite bound for orbit in Chinese high-stakes moon mission today

  • Chang’e 6 is a planned robotic Chinese and Pakistani lunar exploration mission that will attempt China’s second sample return mission
  • Around 100 students from Pakistan’s Institute of Space Technology have contributed to the satellite set for launch on Friday

ISLAMABAD: ‘ICUBE-Qamar’ (ICUBE-Q), a cube satellite, is poised to become Pakistan’s first entry into the lunar orbit as part of China’s Chang’e-6 mission today, Friday, with developers describing it as a “historic moment” that would open new avenues for future deep space missions from the South Asian nation.

Chang’e 6 is a planned robotic Chinese and Pakistani lunar exploration mission that will attempt Beijing’s second sample return mission and aims to obtain the first-ever soil and rock samples from the lunar far side and return them to earth. The samples will contain material ejected from the lunar mantle and will be used to provide insight into the history of the moon, earth, and the solar system.

The primary phase of the mission is expected to last about 53 days. Like its predecessors, the spacecraft is named after the Chinese moon goddess Chang’e.

Around 100 students from Pakistan’s Institute of Space Technology (IST) have contributed to developing the satellite, scheduled to launch into lunar orbit at 12:50 PM PST on Friday, May 3, 2024, from the Wenchang space launch site in Hainan, China.

“This is Pakistan’s first deep space mission which is indeed a historic moment and following that maybe in the future other deep space missions can be planned,” Khurram Khurshid, the head of the electrical engineering and computer science department at IST and a co-lead on the satellite project, told Arab News.

Pakistan’s proposal to build the satellite was accepted by the China National Space Agency (CNSA) from plans submitted by eight member states of the Asia-Pacific Space Cooperation Organization (APSCO).

“In the first month of 2022, out of all the proposals from the APSCO member states, the Chinese space agency thoroughly evaluated and selected one, which happened to be ours which was a significant moment for us as our proposal was chosen in deep space mission.”

The design, development, and qualification of the ICUBE-Q satellite were spearheaded by faculty members and students of the IST in collaboration with China’s Shanghai Jiao Tong University (SJTU), with support from Pakistan’s National Space Agency, SUPARCO.

“Along with faculty members, around 100 students contributed to various aspects of the satellite, including electrical engineering for electronics, aerospace engineering for control systems, computer science for software, and mechanical/materials engineering for identifying materials suitable for the moon’s harsh environment,” Khurshid said. 

The ICUBE-Q has two cameras as payload for taking images of the lunar surface that will be transmitted back to earth for analysis, the official said. 

Khurshid said after selection in 2022, it took two years of round-the-clock work by students and researchers to complete the project within the deadline. 

“The design and development of the satellite were finished approximately eight months ago after rigorous qualification tests, some conducted in-house and others by SPARCO,” he said.

The satellite was then sent to China eight months back for further verification to ensure it met all requirements. 

“China’s stringent standards meant even minor discrepancies could result in rejection, emphasizing the importance of successful qualification tests,” he added, “and once these tests were successfully completed, it marked a significant milestone as it validated our designs and confirmed the satellite’s readiness for the mission.” 

The major cost in such missions was the substantial funding required to launch a satellite, Khurshid said, adding that the cost of manufacturing the satellite was not high and was funded by SUPARCO:

“It is a small satellite, like a 7 kg satellite, so it was not a big cost as major cost required for launching a satellite will be provided free by China.” 

After securing the free launch opportunity, all the faculty and students involved “got very excited and devoted their efforts to this project,” Khurshid said. 

Four of the Pakistan team members are in China to witness the historic launching. 


Pakistan double landmine blasts kill one person, wound at least 18 

Updated 02 May 2024
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Pakistan double landmine blasts kill one person, wound at least 18 

  • First mine exploded when a truck was passing through a valley in coal-rich Duki district in Balochistan province
  • Second detonated when counter-terrorism officials and civilians were examining initial blast site, police said

QUETTA, Pakistan: Double landmine blasts killed one person and wounded at least 18 on Thursday in Pakistan’s southwest, a police officer said.

The first mine exploded when a truck was passing through a valley in coal-rich Duki district in Balochistan province. The second detonated when counter-terrorism officials and civilians were examining the initial blast site, said district police officer Asif Haleem.

No one immediately claimed responsibility for the blast. But Baloch separatist groups have previously struck security personnel or infrastructure in the southwest.

They initially wanted a greater share of provincial resources, but later initiated an insurgency for independence from the central government.

Also on Thursday, an Islamabad-based think tank said that militant assaults killed 70 people nationwide in April, mostly in northwest Khyber Pakhtunkhwa province.

The Pakistan Institute for Conflict and Security Studies also said the country experienced 323 militant attacks in the first four months of the year, resulting in 324 deaths.

Such incidents are unusual in eastern Punjab province, but police said militants from banned groups are responsible for killing three uniformed officers in Lahore city during the past 10 days.

Inspector General of Punjab Usman Anwar urged people to report any suspicious activity.

A report issued in January by another think tank, the Pak Institute for Peace Studies, said there were 306 attacks last year, killing 693 people.


Volunteers who helped with rescue work during UAE rains honored by Pakistani consulate

Updated 02 May 2024
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Volunteers who helped with rescue work during UAE rains honored by Pakistani consulate

  • Last month UAE received heaviest rains in the 75 years that records have been kept
  • Rains brought much of the country to a standstill and caused significant damage

ISLAMABAD: A team of Pakistani volunteers who helped rescue hundreds of people and dozens of vehicles during last month’s record-breaking rains and flooding in the UAE have been honored by the Consulate General of Pakistan in Dubai, a press statement from the mission said on Thursday.

Last month, Dubai was hit by unprecedented storms that paralyzed the Emirates for days. The downpours brought much of the country to a standstill and caused significant damage, flooding trapped residents in traffic, offices and homes and overrunning malls and roads.

“The volunteers were honored with certificates of appreciation by the Consul General in recognition of their unmatched services. Other officers and officials of the consulate were also present on the occasion,” the consulate’s statement said. 

“We are immensely proud of the Pakistani volunteers who demonstrated exceptional courage and compassion during the recent heavy rains in the UAE. Their selfless dedication to rescuing those in need reflects the true spirit of humanity … We salute these volunteers for their unwavering commitment to serving others, and their actions serve as an inspiration to us all.”

One volunteer, Tanvir Athar, said their efforts had also inspired others. 

“After our services in the recent rains, a number of volunteers have connected us and offered their services for any such efforts in future,” Athar was quoted in the statement as saying. 

He said the group of volunteers had been rescuing people stuck in deserts and developed a mobile application to receive requests for assistance. 

Last month, Dubai had to endure the towering task of clearing its water clogged roads and drying out flooded homes after a record storm saw a year’s rainfall in a day. Dubai International Airport, a major travel hub, also struggled for days to clear a backlog of flights and many roads were still flooded in the aftermath of the deluge.

The rains were the heaviest experienced by the United Arab Emirates in the 75 years that records have been kept.